Xapo Severs Links with Blockstream Because ‘Things Have Changed’

Blockstream, a bitcoin startup that is building blockchain solutions, has become a standard feature in the ongoing Bitcoin block-size scaling debate. It is almost impossible to have a talk around the subject without the company popping up somewhere.

As a matter of fact, the mere mention of the startup in forums such as the Bitcoin subreddit (Where Blockstream is most supported) and BTC subreddit (Where Blockstream is most hated) seem always to elicit passionate reactions.

The reason for this is that the Montreal-based Bitcoin startup has not only taken a rather rigid position on the issue, but it is also contributing heavily to the efforts to come up with a solution.

Of the most interest is the fact that it caters for the compensation of the developers who are working on Bitcoin Core, the version of Bitcoin software it sees as best suited to take Bitcoin to the next level. The same developers, or, at least, most of them, happen to be involved with the company’s commercial projects.

Many, especially those supporting different scaling solutions such as Bitcoin Classic, have come to see this as a conflict of interest.

Blockstream needs smaller block size to built on

Furthermore, Blockstream, whichhas raised $76 million from investors so far, is developing other alternative Bitcoin network scaling solutions such as Liquid and Sidechains. These are basically smaller blockchains that are built on top of the Bitcoin one.

It has not been lost to many that these over-the-blockchain scaling solutions might only be viable if the Bitcoin blockchain itself does not scale in any meaningful way.

It is on the backdrop of this thatXapo, a leading bitcoin wallet service provider, through Ted Rogers, its president, has disclosed that it has severed links with Blockstream.

The declaration was made during atweeter conversation-you guessed right- about the current debate on Bitcoin block size scaling. One Twitter user pointed out to Ted Rogers that while he seems to support Bitcoin Core, Xapo is listed as one of thelaunch partners and ardent supporter of Sidechains and Liquid projects on Blockstream’s website.

“That was then, this is now. Things have changed,” he replied.

A change of allegiance

Of course, now this position contrasts with the one given by Federico Murrone, Xapo’s CEO, when Blockstream was launching Liquid in November 2015.

“We are enthusiastic about supporting Blockstream, which has one of the strongest development teams in the fintech industry, and their Bitcoin-based approach to financial innovation,” Federico Murrone was quoted saying then, “Xapo works with some of the largest exchanges in the Bitcoin space and we believe that, by implementing Liquid, we can help solve several of their main pain points.”

The cause of change can likely be attributed by the fact that Blockstream does not only find itself at loggerheads with a section of the Bitcoin community but also that the situation seems to be worsening with time.

The impression that the company is standing in the way of increasing the block size so as to create market for its own scaling solutions is really not helping matters.

Do you think that Xapo ending its partnership with Blockstream signals difficult times ahead for the latter’s image? Share your thoughts below.

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